CANADA FX DEBT-C$ hits one-year high on improved risk appetite

Wed Oct 7, 2009 7:57am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

 * C$ rises to highest level since Oct. 2008
 * Increased risk appetite drives C$ gain
 * Bond prices up across the curve
 By Frank Pingue
 TORONTO, Oct 7 (Reuters) - Canada's currency rose against
the U.S. dollar early on Wednesday as an improved outlook on
the global economy helped boosted risk appetite and prices for
key domestic exports like oil and gold.
 The upbeat tone spilled over from Tuesday when the Reserve
Bank of Australia raised its interest rate, becoming the first
central bank in the Group of 20 nations to tighten policy as
the financial crisis abates. [ID:nSYD520296]
 Talk that the global economy is recovering and will boost
demand for commodities helped to lift oil prices above $71 a
barrel and gold to a record high above $1,048 an ounce. [O/L]
[GOL/]
 That all helped to send the Canadian dollar to C$1.0526 to
the U.S. dollar, or 95.00 U.S. cents, which marked its highest
level since Oct 1, 2008.
 "It's continued risk appetite, and the currency isn't
moving alone, it's in line with the other commodity-based
currencies," said Matthew Strauss, senior currency strategist
RBC Capital Markets. "It's mostly spillover of yesterday's
optimism after the rate hike that was taken as further
indication that the global recovery is becoming more
entrenched."
 At 7:35 a.m. (1135 GMT), the Canadian unit was at C$1.0568
to the U.S. dollar, or 94.63 U.S. cents, up from C$1.0596 to
the U.S. dollar, or 94.38 U.S. cents, at Tuesday's close.
 Domestic bond prices were higher across the curve, taking
their cue from the bigger U.S. Treasury market.
 No Canadian data is due out until Thursday's housing starts
report, which is expected to show the number of groundbreakings
fell to a seasonally adjusted annualized rate of 148,000 in
September from 150,400 in August.
 (Editing by Padraic Cassidy)